J. J. Keller® Compliance Network Logo
Start Experiencing Compliance Network for Free!
Update to Professional Trial!

Be Part of the Ultimate Safety & Compliance Community

Trending news, knowledge-building content, and more – all personalized to you!

Already have an account?
Thank you for investing in EnvironmentalHazmat related content. Click 'UPGRADE' to continue.
Enjoy your limited-time access to the Compliance Network Professional Trial!
A confirmation welcome email has been sent to your email address from ComplianceNetwork@t.jjkellercompliancenetwork.com. Please check your spam/junk folder if you can't find it in your inbox.
Thank you for your interest in EnvironmentalHazmat related content.
You've reached your limit of free access, if you'd like more info, please contact us at 800-327-6868.

This is the first article in a two-part series. Part two will be published tomorrow.

The Federal Motor Carrier Safety Administration’s (FMCSA) mission statement is succinct: "To reduce crashes, injuries, and fatalities involving large trucks and buses." The agency views the FMCSA regulations as the minimum requirements for safe operation. Therefore, non-compliance with the rules exposes you to violations, fines, risk (of the crashes, injuries, and fatalities the regulations were created to prevent), and litigation.

When considering the return on investment (ROI) for compliance programs, there is no simple formula. There are too many variables, including:

  • The current level of compliance,
  • Company culture,
  • Technology already in place,
  • Tenure and skill level of the drivers,
  • Age of the vehicles,
  • Training, etc.

The cost and impact of non-compliance with FMCSA regulations can still be quantified. Expenses fall primarily into seven areas:

  • The cost of an accident,
  • The expense of litigation,
  • Fines associated with violations,
  • Insurance premiums,
  • Lost productivity,
  • Driver turnover, and
  • Loss of business.

In this first of two articles, we will review the first three.

Cost of an Accident

Since the FMCSA's mission is to reduce crashes, the agency tracks the numbers closely. Their latest study of 2020 accidents can be found in their “Pocket Guide to Large Truck and Bus Statistics” (released December 2022). Staggering accident statistics include the following:

  • 445,000 accidents involved a large truck or bus,
  • 4,965 total fatalities,
  • 4,588 of the accidents (10%) resulted in at least one fatality,
  • 83% of the fatalities were NOT the occupant of the truck or bus,
  • 108,000 of the accidents (about 25%) resulted in at least one injury,
  • 147,000 total injuries,
  • 332,000 of the accidents (about 75%) resulted in property damage,
  • $143,000,000,000.00 estimated costs of all large truck and bus crashes, and
  • $321,348.00 estimated average cost per large truck or bus crash.

To determine accident ROI, multiply the reduction of accidents per million miles by the carrier’s average accident cost.

Accidents are expensive, however no financial compensation can address the emotional and physical impact on individuals who survive or lose loved ones in these tragic accidents. Fleets, however, can actively pursue an elevated level of compliance and safety best practices to reduce the risk of accidents.

Expense of Litigation

While money cannot make a permanently damaged body or mind whole or return a loved one to their family, damage awards are an attempt to do so. Awards may also compensate an individual for actual financial losses, including loss of income, current and future medical expenses, property repair, funeral expenses, etc. These damage awards can be extremely costly, but the most sizable portion is often a punitive damage award. As the name implies, these awards are meant to punish those responsible for the accident.

Punitive damages result from a plaintiff's attorney successfully arguing that the carrier should have or could have done more to prevent the accident. It is important to note that the facts of the specific accident, such as preventability or "fault," are not necessarily even mentioned.

There is a direct correlation between an alleged infraction in a lawsuit and payment size. In a 2021 study, "The Impact of Small Verdicts and Settlements on the Trucking Industry," ATRI found a significant payment size range based on the alleged violation. For instance, alleging that a driver was following too close was at the low end of awards at $339,977.00 versus the top end, alleging that the driver had a poor history at the top of the list at $680,333.00. Carriers that are not investing in their safety culture by effectively monitoring and correcting driver behavior help plaintiff attorneys make the case against them. "You should have known!"

Fleets that actively pursue a high level of compliance and safety best practices can reduce the risk of litigation resulting from accidents. To determine litigation ROI attorney fees litigation awards, and settlements can be compared year over year.

Fines Associated with Non-compliance

Roadside inspection fines can range from under one-hundred dollars to thousands of dollars – depending on the state, officer, and violation. As they often are, if the fines are passed onto the driver, it leads to higher turnover.

During an audit or compliance review, the fines for non-compliance can be much higher. In fact, the Department of Transportation (DOT) announced a 7.745 percent increase to civil penalties for all modes, including highway. The increase went into effect on January 6, 2023, with an intention to maintain the financial motivation for DOT-regulated employers to abide by federal regulations. The increases included:

  • Up to $28,304.00 for operating in violation of an OOS (Out of Service) order,
  • Up to $14,960.00 for a recordkeeping violation,
  • Up to $18,170.00 for non-recordkeeping violations,
  • Up to $96,624.00 for violations of the HMRs (Hazardous Material Regulations).

The FMCSA maintains a list of “closed enforcement cases.” A case is considered closed once the carrier has paid the claim in full, has signed a settlement agreement with the FMCSA, or has defaulted on a “notice of claim.”

In the last full year, 2022, the FMCSA closed 3,617 cases, with an average fine of $7,106.05 totaling $25,702,571.00.

Fines paid due to roadside inspections and unsafe driving violations are measures that are easily tracked year-over-year.

Key to remember

The cost of non-compliance is often higher than the expense of operating safely and compliantly.